STA Interpretation: Optimizing and Integrating the Export Tax Refund Information System to Better Serve Taxpayers

关于《国家税务总局关于优化整合出口退税信息系统 更好服务纳税人有关事项的公告》的解读

Source (Chinese): STA Policy Database — 政策解读 (State Taxation Administration, June 15, 2021)

English translation: Independent translation. Not an official government translation.

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In accordance with the work arrangements, the STA has issued the Announcement on Matters Concerning the Optimization and Integration of the Export Tax Refund Information System to Better Serve Taxpayers (hereinafter the "Announcement"). The interpretation is as follows:

Q1: What is the background for issuing the Announcement?

Answer: To implement the decisions and arrangements of the CPC Central Committee and the State Council, continue to deepen the "streamlining administration, delegating power, strengthening regulation, and improving services" reform and optimize the business environment, actively implement the Opinions on Further Deepening Tax Collection and Administration Reform issued by the General Office of the CPC Central Committee and the General Office of the State Council, better serve market entities, and follow the requirements for carrying out the "I Do Practical Things for the People" practical activities in the course of the Party History Study and Education campaign, the STA has integrated the Golden Tax Phase III system and the export tax refund management system by developing an export tax refund management module within the Golden Tax Phase III system. This system integration work adhered to the principle of serving and facilitating the people, guided by optimizing law enforcement services and accomplishing practical matters that benefit the people. It substantially streamlined and optimized export tax refund/exemption declaration, submitted materials, processing procedures, certificate issuance, and classification management measures, and added convenient service functions. To clarify the above export tax refund/exemption-related matters, the STA has issued the Announcement.

Q2: After the Announcement takes effect, where a taxpayer is unable to declare export tax refund/exemption within the prescribed period because the export customs declaration form for the refund/exemption declaration lacks electronic information, is it still necessary to file a "no electronic information" declaration in advance?

Answer: No, it is not necessary. Before the Announcement took effect, where a taxpayer was unable to declare export tax refund/exemption on time because refund/exemption declaration documents such as the export customs declaration form lacked electronic information, the taxpayer was required to apply to the competent tax authority for a "no electronic information" declaration before the export tax refund/exemption declaration deadline, and then declare export tax refund/exemption after collecting the electronic information. To reduce the filing burden on taxpayers, after the Announcement takes effect, taxpayers who are unable to declare export tax refund/exemption within the prescribed period because refund/exemption declaration documents lack electronic information may directly declare export tax refund/exemption after collecting the electronic information, without the need to file a "no electronic information" declaration in advance.

Q3: After the Announcement takes effect, where a taxpayer exporting goods and services, engaging in cross-border taxable activities, or deemed to export goods, or where an R&D institution procures domestically produced equipment, is unable to declare export tax refund/exemption on time because VAT purchase vouchers have not been collected, are they all exempt from applying for a declaration extension in advance and may directly file the export tax refund/exemption declaration after obtaining the VAT purchase vouchers?

Answer: Yes. Before the Announcement took effect, where taxpayers exporting goods and services, engaging in cross-border taxable activities, or deemed to export goods, or where R&D institutions procuring domestically produced equipment, were unable to timely obtain VAT purchase vouchers, export customs declaration forms, or other refund/exemption declaration documents due to economic disputes with suppliers or other reasons and thus were unable to declare export tax refund/exemption on time, they were required to apply to the competent tax authority for a declaration extension before the export tax refund/exemption declaration deadline, and then declare export tax refund/exemption after collecting the declaration documents. To reduce the filing burden on taxpayers, after the Announcement takes effect, taxpayers who are unable to declare export tax refund/exemption on time because refund/exemption declaration documents have not been collected may directly declare export tax refund/exemption after collecting the declaration documents, without the need to apply for a declaration extension in advance.

Q4: What changes have occurred in the forms and materials that taxpayers must submit when filing export tax refund/exemption registration before and after the Announcement takes effect?

Answer: Before the Announcement took effect, when filing export tax refund/exemption registration, taxpayers were required to submit the Export Tax Refund/Exemption Registration Form, along with two documents: the Record Registration Form for Foreign Trade Operators (or the Approval Certificate for Foreign-Invested Enterprises of the People's Republic of China) and the Registration Certificate for Customs Declaration Units of the People's Republic of China. Manufacturing enterprises that had not completed registration but engaged in entrusted export business were required to provide the entrustment/agency export agreement, and were exempt from submitting the above two documents. To reduce the filing burden on taxpayers, the Announcement simplified the materials to be submitted at the registration stage. After simplification, all taxpayers filing export tax refund/exemption registration are no longer required to submit the Record Registration Form for Foreign Trade Operators (or the Approval Certificate for Foreign-Invested Enterprises of the People's Republic of China) and the Registration Certificate for Customs Declaration Units of the People's Republic of China.

Q5: What changes have occurred in the forms that manufacturing enterprises must submit when filing exemption-credit-refund declarations for export goods and services before and after the Announcement takes effect?

Answer: Before the Announcement took effect, when filing exemption-credit-refund declarations for export goods and services, manufacturing enterprises were required to submit four forms simultaneously: the Exemption-Credit-Refund Declaration Summary Form, the Exemption-Credit-Refund Declaration Summary Form Attachment, the Exemption-Credit-Refund Declaration Materials Status Form, and the Manufacturing Enterprise Export Goods Exemption-Credit-Refund Declaration Detail Form. Where domestic tax-exempt raw materials not subject to input tax calculation were used in processing export goods, the Manufacturing Enterprise Export Goods Deduction of Domestic Tax-Exempt Raw Materials Application Form also had to be submitted simultaneously. To reduce the filing burden on taxpayers, the Announcement streamlined and optimized the above declaration forms, eliminating the requirement for taxpayers to submit forms where the information can be obtained through digitized means. After streamlining and optimization, manufacturing enterprises filing exemption-credit-refund declarations need only submit two forms: the Exemption-Credit-Refund Declaration Summary Form and the Manufacturing Enterprise Export Goods and Services Exemption-Credit-Refund Declaration Detail Form. The remaining three forms are no longer required.

Q6: What changes have occurred in the forms that foreign trade enterprises must submit when filing exemption-refund declarations for export goods before and after the Announcement takes effect?

Answer: Before the Announcement took effect, when filing exemption-refund declarations for export goods, foreign trade enterprises were required to submit three forms simultaneously: the Foreign Trade Enterprise Export Tax Refund Purchase Detail Declaration Form, the Foreign Trade Enterprise Export Tax Refund Export Detail Declaration Form, and the Foreign Trade Enterprise Export Tax Refund Summary Declaration Form. To reduce the filing burden on taxpayers, the Announcement further improved the cross-checking relationships between declaration forms and streamlined and optimized the existing declaration forms and fill-in items. After streamlining and optimization, foreign trade enterprises filing exemption-refund declarations need only submit the Foreign Trade Enterprise Export Tax Refund Purchase Detail Declaration Form and the Foreign Trade Enterprise Export Tax Refund Export Detail Declaration Form. The Foreign Trade Enterprise Export Tax Refund Summary Declaration Form is no longer required.

Q7: What changes have occurred in the forms that taxpayers must submit when filing exemption-credit-refund declarations for international transportation before and after the Announcement takes effect?

Answer: Before the Announcement took effect, when filing exemption-credit-refund declarations for international transportation, taxpayers were required to submit three forms: the Exemption-Credit-Refund Declaration Summary Form, the Exemption-Credit-Refund Declaration Summary Form Attachment, and the VAT Zero-Rated Taxable Services (International Transportation/Hong Kong, Macau, Taiwan Transportation) Exemption-Credit-Refund Declaration Detail Form. To reduce the filing burden on taxpayers, the Announcement further improved the cross-checking relationships between declaration forms and streamlined and optimized the existing declaration forms and fill-in items. After streamlining and optimization, when filing exemption-credit-refund declarations for international transportation, taxpayers need only submit the Exemption-Credit-Refund Declaration Summary Form and the International Transportation (Hong Kong, Macau, Taiwan Transportation) Exemption-Credit-Refund Declaration Detail Form. The Exemption-Credit-Refund Declaration Summary Form Attachment is no longer required.

Q8: What changes have occurred in the forms that taxpayers must submit when filing exemption-refund declarations for providing R&D services to overseas entities before and after the Announcement takes effect?

Answer: Before the Announcement took effect, when filing exemption-refund declarations for cross-border taxable activities such as providing R&D services to overseas entities, taxpayers were required to submit three forms simultaneously: the Foreign Trade Enterprise Export Tax Refund Summary Declaration Form, the Foreign Trade Enterprise Purchased Taxable Services Export Detail Declaration Form, and the Foreign Trade Enterprise Export Tax Refund Purchase Detail Declaration Form. To reduce the filing burden on taxpayers, the Announcement streamlined and optimized the declaration forms and fill-in items. After streamlining and optimization, when filing exemption-refund declarations for cross-border taxable activities such as providing R&D services to overseas entities, taxpayers need only submit one form: the Cross-Border Taxable Activities Exemption-Refund Declaration Detail Form. The remaining forms are no longer required.

Q9: Where a taxpayer discovers errors in export tax refund/exemption declaration data that has been submitted but not yet approved by the competent tax authority, may the taxpayer apply to withdraw the declaration data? How should the withdrawal be processed?

Answer: Yes, the withdrawal is permitted. The Announcement specifies that where a taxpayer discovers errors in export tax refund/exemption declaration data that has been submitted but not yet approved by the competent tax authority, the taxpayer may submit the Application to Withdraw Refund/Exemption Tax Declaration to the tax authority to apply for the withdrawal of the declaration data. When applying for withdrawal, foreign trade export enterprises shall withdraw the refund/exemption tax declaration by batch, while manufacturing export enterprises shall withdraw the refund/exemption tax declaration by attribution period. The competent tax authority may approve the withdrawal of the declaration provided no circumstances warranting denial of the refund are found in the relevant declaration data.

Q10: Previously, duty-free cigarettes exported under the national plan were required to clear customs directly through designated port customs to qualify for tax-exempt verification procedures. Now that customs has fully implemented integrated clearance, have the relevant tax administration regulations also changed?

Answer: Yes. Considering the practical implementation of fully integrated customs clearance, the Announcement specifies that in regions where integrated clearance has been implemented, from the date of implementation in the respective region, duty-free cigarettes exported through clearance at any customs office may undergo tax-exempt verification procedures in accordance with regulations.

Q11: The Announcement has adjusted the Application Form for Certificate of Agency Export Goods that taxpayers must submit when applying for the issuance of the Certificate of Agency Export Goods, reducing the total number of items that taxpayers need to complete and adding only one new field — "Entrusted Export Goods Certificate Number." What is the main rationale for adding this field?

Answer: The main rationale is to reduce the filing burden on taxpayers to the greatest extent possible while also facilitating management. After adding the "Entrusted Export Goods Certificate Number" field, the tax authority can directly index the corresponding Certificate of Entrusted Export Goods through electronic information. Accordingly, when applying for the issuance of the Certificate of Agency Export Goods, taxpayers are no longer required to submit the paper Certificate of Entrusted Export Goods. Instead, the tax authority will independently search for and match the corresponding Certificate of Entrusted Export Goods information based on the "Entrusted Export Goods Certificate Number."

Q12: The Announcement has changed the former Certificate of Tax Repaid/Not Refunded for Returned Export Goods to the Certificate of Tax Repaid/Not Refunded for Export Goods. Does this adjustment only involve the name of the certificate?

Answer: The Announcement's adjustments are not limited to the certificate name. The changes also include: First, simplification of forms and fill-in items. The Application Form for Certificate of Tax Repaid/Not Refunded for Returned Goods (submitted by the taxpayer) and the Certificate of Tax Repaid/Not Refunded for Returned Export Goods (issued by the tax authority) have been simplified and merged into a single certificate form (the Certificate of Tax Repaid/Not Refunded for Export Goods) that serves both the taxpayer's submission and the tax authority's issuance, and the number of items that taxpayers need to fill in has been reduced. Second, expansion of the certificate's purposes. Based on taxpayer demands and the actual requirements of customs supervision, the scope of use of this certificate has been expanded from its previous single purpose of processing export goods return procedures to multiple purposes including processing export goods return procedures and modifying or cancelling export customs declaration forms.

Q13: Where a taxpayer discovers errors in an export tax refund/exemption-related certificate after it has been issued, may the taxpayer apply to void the issued certificate? How should the application be made?

Answer: Yes, the taxpayer may apply to void the certificate. After the Announcement takes effect, where a taxpayer needs to void an export tax refund/exemption-related certificate, the taxpayer may submit a voiding application to the competent tax authority and return the original paper certificate. Additionally, to facilitate taxpayer declarations, the tax authority has provided standardized application templates and convenient application service functions on the Electronic Tax Bureau, the standard version of the International Trade "Single Window," and the offline export tax refund declaration tool. Taxpayers may choose to use the above functions to submit voiding applications or prepare their own written applications for on-site submission to the tax authority, as needed.

Q14: What adjustments has the Announcement made to the criteria for Category Three export enterprises under the Export Tax Refund/Exemption Enterprise Classification Management Measures?

Answer: Before the Announcement took effect, in accordance with the Export Tax Refund/Exemption Enterprise Classification Management Measures (published by STA Announcement 2016 No. 46, amended by 2018 No. 31) and the STA Report on Accelerating Export Tax Refund Processing (2018 No. 48), export enterprises with any of the following circumstances were to be classified as Category Three:

1. Less than 12 months have elapsed from the date of the first export tax refund/exemption declaration filing to the time of classification assessment.

2. At the time of assessment, the taxpayer credit rating is Category C, or the taxpayer credit rating has not yet been assessed.

3. During the previous year, there were instances of violating export tax refund/exemption-related regulations, but the violations did not reach the thresholds for administrative penalties by the tax authority or judicial proceedings.

4. Other circumstances involving dishonesty or risk as specified by the provincial-level tax bureau.

In accordance with the STA Announcement on Matters Concerning Taxpayer Credit Rating Assessment (2018 Announcement No. 8), which added the Category M taxpayer credit rating, the Announcement has added "Category M taxpayer credit rating" to the second circumstance in the criteria for Category Three export enterprise classification.

Q15: After the annual assessment of export tax refund/exemption classification management categories is completed, when does the assessment result take effect?

Answer: In accordance with the Announcement, the annual assessment results for export tax refund/exemption classification management categories take effect on the first day of the month following the completion of the assessment.

Q16: Article 6 of the Announcement specifies that additional convenient service functions are to be added to the three free declaration channels — the Electronic Tax Bureau, the standard version of the International Trade "Single Window," and the offline export tax refund declaration tool. What is the main rationale?

Answer: The main rationale is to facilitate taxpayer declarations. Currently, when handling matters such as the withdrawal of export tax refund/exemption registration and adjustment of the processing trade plan allocation ratio, taxpayers are required to submit relevant applications to the tax authority in accordance with document requirements, and must submit paper materials to the tax authority. To facilitate taxpayer declarations, the tax authority has provided standardized application formats on the Electronic Tax Bureau, the standard version of the International Trade "Single Window," and the offline export tax refund declaration tool, and supports convenient service functions such as digitized collection, printing, output, and uploading of relevant applications. To help taxpayers fully understand the relevant circumstances and timely enjoy the convenient services, Article 6 of the Announcement publishes the content of the export tax refund/exemption convenient services.